[TEXT]
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(MARK ONE)
{X} ANNUAL REPORT PURSUANT TO SECTION 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
OR
{ } TRANSITION REPORT PURSUANT TO SECTION 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 001-12275
COGNIZANT CORPORATION SAVINGS PLAN
COGNIZANT CORPORATION
200 NYALA FARMS, WESTPORT, CT 06880
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Compensation and Benefits Committee of the Cognizant Corporation has duly caused
this annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
Cognizant Corporation Savings Plan
(Name of Plan)
/s/ James C. Malone
(Signature)
James C. Malone
Senior Vice President - Finance &
Controller
June 18, 1997
<PAGE>
COGNIZANT CORPORATION SAVINGS PLAN
DECEMBER 31, 1996
TABLE OF CONTENTS
PAGE (S)
Report of Independent Accounts. . . . . . . . . . . . . . . . . . . . . . . 4
Financial Statements:
Statement of Net Assets Available for Benefits as of December 31, 1996. . 5
Statement of Changes in Net Assets Available for Benefits for the
period November 1, 1996(inception date)through December 31, 1996. .6 - 7
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . 8 - 11
Supplemental Schedules:
Item 27a: Schedule of Assets held for Investment Purposes. . . . . 12
Item 27d: Schedule of Reportable Transactions. . . . . . . . . . . 13
Exhibit Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Exhibit 23 -- Consent of Independent Accountants. . . . . . . . . . . . . . 15
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Compensation and Benefits Committee of the Board of Directors of
Cognizant Corporation:
We have audited the accompanying statement of net assets available for
benefits of the Cognizant Corporation Savings Plan as of December 31, 1996 and
related statement of changes in net assets available for benefits for the period
November 1, 1996 (inception date) through December 31, 1996. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of the Cognizant
Corporation Savings Plan as of December 31, 1996, and the changes in net assets
available for benefits for the period November 1, 1996 (inception date) through
December 31, 1996 in conformity with generally accepted accounting principles.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The fund information in the
statement of net assets available for benefits as of December 31, 1996 and the
statement of changes in net assets available for benefits for the period
November 1, 1996 (inception date) through December 31, 1996 is presented for the
purposes of additional analysis rather than to present the net assets available
for benefits and changes in net assets available for benefits of each fund. The
supplemental schedules and fund information have been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Stamford, Connecticut
June 18, 1997
<PAGE>
<TABLE>
COGNIZANT CORPORATION SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
AS OF DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
<CAPTION>
Small
Cognizant Long Dun & Company Interna-
Equity Common Fixed Term Bradstreet Equity tional Balanced
Index Stock Income Bond Legacy Index Equity Index Loan
Total Fund Fund Fund Fund Fund Fund Index Fund Fund Fund
----------- -------- -------- ------- ------- ----------- ---------- ----------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments at fair value 89,451 37,580 332 32,227 7,894 11,297 121
Interfund - (955) 1,837 5,574 (7,889) (1,786) 1,079 758 1,382
receivable/(payable).....
Loan and interest
receivable/(payable)..... 22 33 48 86 (5) (14) - - (126)
Receivables:
Members contributions 247 174 73 - - - - -
Company contributions 81 56 25 - - - - -
Dun & Bradstreet Profit
Participation Plan 8,969 4,252 - 901 - 4 - - - 3,812
--------- -------- -------- ------- --------- ---------- -------- ---------- ---------- --------
Net assets available for 98,770 41,140 2,315 38,788 0 9,501 1,079 758 1,382 3,807
benefits................ ========== ======== ======== ======= ======== ========== ======== ========== =========== =======
<FN>
The accompanying notes are
an integral part of this statement.
</FN>
</TABLE>
<PAGE>
<TABLE>
COGNIZANT CORPORATION SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE PERIOD NOVEMBER 1, 1996(INCEPTION DATE)THROUGH DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
<CAPTION>
Small Interna-
Cognizant Long Dun & Company tional
Equity Common Fixed Term Bradstreet Equity Equity Balanced
Index Stock Income Bond Legacy Index Index Index Loan
Total Fund Fund Fund Fund Fund Fund Fund Fund Fund
--------- -------- ----------- --------- ------- ------------ --------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Transfer from Dun & Bradstreet
Profit Participation
Plan on November 1, 1996 92,475 38,607 - 32,155 7,554 10,347 - - - 3,812
Investment income:
Net realized appreciation 445 90 - - - 355 - - - -
Net unrealized appreciation/
Interest income................ 488 - - 333 80 75 - - - -
--------- --------- ------- ---------- --------- ---------- ---------- ---------- -------- -------
Total investment income..... 3,654 2,258 (13) 333 85 991 -
Interest on members loans 48 20 8 16 4 - - - - -
Repayment of members loans 0 112 43 104 21 - - - - (279)
Contributions:
Members......................... 1,890 893 321 511 165 - - - - -
Company......................... 651 304 112 178 57 - - - - -
Rollover........................ 67 37 10 9 11 - - - - -
--------- --------- -------- ---------- --------- ----------- ---------- ---------- -------- ------
Total contributions............ 2,608 1,234 443 698 233 - - -
--------- ------------------ ---------- --------- ----------- ---------- ---------- ------- -------
Total additions............. 98,786 42,231 481 33,306 7,897 11,338 - - - 3,533
========= ========= ======== ========== ========= =========== ========== ========== ======= =======
<FN>
The accompanying notes are
an integral part of this statement.
</FN>
</TABLE>
<PAGE>
<TABLE>
COGNIZANT CORPORATION SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE PERIOD NOVEMBER 1, 1996(INCEPTION DATE) THROUGH DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
<CAPTION>
Small Interna-
Cognizant Long Dun & Company tional
Equity Common Fixed Term Bradstreet Equity Equity Balanced
Index Stock Income Bond Legacy Index Index Index Loan
Total Fund Fund Fund Fund Fund Fund Fund Fund Fund
--------- --------- ---------- -------- -------- ----------- -------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Deductions from net assets attributed to:
Benefits paid to members....... (16) (10) - - (1) - - - - -
Loans to members .............. - (126) (3) (92) (7) (46) - - - 274
-------- --------- ----------- --------- ------- ---------- ---------- --------- --------- ---------
Total deductions......... (16) (136) (3) (92) (8) (51) - - - 274
-------- --------- ----------- --------- ------- ---------- ---------- --------- --------- ---------
Net increase prior to
interfund transfers........... 98,770 42,095 478 33,214 7,889 11,287 - - - 3,807
======== ========= =========== ========= ======= ========== ========== ========= ========= =========
Inter fund transfers - net.... - (955) 1,837 5,574 (7,889) (1,786) 1,079 758 1,382 -
-------- --------- ----------- --------- ------- ---------- ---------- --------- --------- ---------
Net increase ................. 98,770 41,140 2,315 38,788 9,501 1,079 758 1,382 3,807
======== ========= =========== ========= ======= ========== ========== ========= ========= =========
Net assets available for benefits:
Beginning of period.......... - - - - - - - - - -
End of year.................. 98,770 41,140 2,315 38,788 - 9,501 1,079 758 1,382 3,807
========= ========= ========== ========= ======= ========== ========== ========= ========= =========
<FN>
The accompanying notes are
an integral part of this statement.
</FN>
</TABLE>
<PAGE>
COGNIZANT CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- DESCRIPTION OF THE PLAN
On November 1, 1996 (the "Inception Date"), Cognizant Corporation
(the "Company") began operating as an independent publicly held company as a
result of its spin-off from The Dun & Bradstreet Corporation ("Dun &
Bradstreet"). Prior to the spin-off, the Company was owned by Dun & Bradstreet.
As of the Inception Date the Company adopted the Cognizant Corporation Savings
Plan (the "Plan") for the benefit of Cognizant employees who were members in the
Dun & Bradstreet Profit Participation Plan. On December 20, 1996, Dun &
Bradstreet transferred to the Trustee 90% of the account balances of Company
member investments, with the remaining amount transferred on January 7, 1997.
The following description of the Plan provides only general information.
Members should refer to the Plan document for a more complete description of the
Plan's provisions. Information with regard to eligibility, contributions,
distributions, vesting, trustees, withdrawals, restoration, loans, fund
redistribution, and definitions of all terms are contained in that document.
General
The Plan is a defined contribution plan available to all U.S. employees
of the Company which have been designated to participate in the Plan. Full-time
and regular part-time employees are eligible to participate in the Plan on the
first month following their first day of employment. Temporary employees who
work at least 1,000 hours in their first year of employment, or any subsequent
calendar year, are also eligible to participate. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
Contributions
A member may elect to contribute 1% to 16% of compensation. A member may
designate savings as Before-Tax Savings or After-Tax Savings. A member who is a
highly compensated employee may be limited to less than 16% due to the existence
of certain tests required under the Internal Revenue Code (the "Code"). For
1996, the Code limit on Before-Tax contributions was $9,500.
An amount equal to 50% of a member's savings, up to the first 6%, is
matched by the Company. Member savings in excess of 6% are supplemental savings
that are not matched by Company contributions. Matching Company contributions
are invested in the same investment funds as the member's own contributions.
The member's contributions and the Company's matching contributions are
forwarded monthly to the plan trustee.
Member Accounts
Each member's account is credited with the member's contribution and
allocations of (a) the Company's contributions and (b) Plan earnings.
Vesting
Members are 100% vested in the Company matching contributions after the
third year of employment. Notwithstanding the foregoing statement, a member
becomes fully vested in their Company contribution account upon retirement,
disability, death, or reaching age 65.
<PAGE>
COGNIZANT CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - - (CONTINUED)
NOTE 1 -- DESCRIPTION OF THE PLAN (CONTINUED)
Investment Funds
Contributions for member savings shall be invested in selected
investment funds, in multiples of 5%. All dividends and earnings from funds are
reinvested in that same fund. However, dividends paid on common stock in the Dun
& Bradstreet Legacy Fund may be held in a short-term investment fund.
Equity Index Fund -- A fund invested in the common stock of companies
included in the Standard&Poor's 500 Stock Index. There are 2,667 members
invested in this fund.
Cognizant Common Stock Fund -- A fund invested in the common stock of
Cognizant Corporation. There are 1,692 members invested in this fund.
Fixed Income Fund -- A fund invested in guaranteed investment contracts
(GICs) with one or more insurance companies and/or financial institutions
selected by the Company. The insurance companies and/or financial institutions
contract to repay both principal and a specific rate of return, from 5.35% to
7.33% with maturity dates from April 1, 1997 to October 2, 2000. The contract
values of the guaranteed investment contracts approximate their fair market
value. There are 2,460 members in this fund.
Long Term Bond Fund -- A fund invested in fixed income securities,
including, but not limited to, U.S. government and agency securities, mortgage
backed securities issued by agencies of the U.S. government and investment grade
corporate securities. As of December 31, 1996, assets in this fund have been
transferred to the Fixed Income Fund.
Dun & Bradstreet Legacy Fund -- A fund consisting of shares of the
Company, Dun & Bradstreet and ACNielsen Corporation common stock. This fund
replaced the Dun & Bradstreet Common Stock Fund in the Profit Participation Plan
of Dun & Bradstreet and represents frozen participant assets. Members may not
make any additional contributions or transfer any additional balances to this
fund. There are 1,184 members in this fund.
Small Company Equity Index Fund -- A fund invested in common stocks
in the U.S.equity market that are not included in the Standard & Poor's 500 (S&P
500) Stock Index. There are 111 members in this fund.
International Equity Index Fund -- A fund invested in a portfolio of
securities traded outside the United States. Investment selections are based on
the Europe, Australia and Far East Index. There are 82 members in this fund.
Balanced Index Fund -- A fund comprised of 60% equity stocks (S&P 500)
and 40% U.S. debt instruments. There are 77 members in this fund.
The following investments represent 5% or more of net assets available for
benefits: (dollar amounts in thousands)
Equity Index Fund 37,580
Fixed Income Fund 32,227
Dun & Bradstreet Legacy Fund 11,297
<PAGE>
COGNIZANT CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - - (CONTINUED)
NOTE 1 -- DESCRIPTION OF THE PLAN (CONTINUED)
Members Loans
Members may borrow from their fund accounts a minimum of $500 up to a
maximum equal to the lesser of 50 percent of their vested account balance or
$50,000 minus the highest outstanding loan balance they had in the preceding 12
months. Loan transactions are treated as a transfer to (from) the investment
fund from (to) the loan fund. The maximum loan term is 57 months or up to 117
months for the purchase of a primary residence. The loans are secured by the
balance in the members account and bear interest at the prime rate as published
in The Wall Street Journal plus 2%. Principal and interest is paid ratably
through monthly payroll deductions
Payments of Benefits
On termination of service due to death, disability, retirement or other
reasons, a member may elect to receive either a lump sum amount equal to the
value of the member's vested interest in his or her account or, subject to
certain conditions, annual installments over a period not greater than twenty
years.
Members may also elect to defer distributions subject to certain conditions.
Forfeitures
Forfeitures of terminated member's nonvested contributions are applied
to reduce future Company contributions. There were no forfeitures for the period
November 1, 1996 through December 31, 1996.
Administrative Expenses
Transaction and investment manager fees for each fund are charged
against the Plan's assets. Trustee fees and other expenses of administering the
Plan are borne by the Company.
NOTE 2 -- ACCOUNTING POLICIES
The financial statements of the Plan are prepared under the accrual
method of accounting. The Plan's financial statements have been prepared in
conformity with generally accepted accounting principles. The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
investment income and expenses during the reporting period. Actual results could
differ from those estimates.
The Plan provides for various investment options in any combination of
stocks, bonds, fixed income securities, mutual funds, and other investment
securities. Certain investment securities are exposed to various risks, such as
interest rate, market and credit. Due to the level of risk associated with
certain investment securities and the level of uncertainty related to changes in
the value of investment securities, it is at least reasonably possible that
changes in risks in the near term would materially affect members' account
balances and the amounts reported in the statement of net assets available for
benefits and the statement of changes in net assets available for benefits.
The Plan's guaranteed investment contracts are stated at contract
values, which represent the aggregate amount of deposits thereto, plus interest
at the contract rate, less withdrawals. Mutual funds are valued at the net asset
values reported by the funds. Company stock is valued at its quoted market
price.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
<PAGE>
COGNIZANT CORPORATION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS - - (CONTINUED)
NOTE 3 -- FEDERAL INCOME TAX
A request for formal determination that the Plan is qualified and the
trust established under the Plan is tax-exempt has been made of the Internal
Revenue Service. In the opinion of management, a favorable ruling is expected in
due course. The Plan administrator and the Plan's tax counsel believe that the
Plan is designed and is currently being operated in compliance with the
applicable provisions of the Code.
NOTE 4 -- PLAN TERMINATION
While the Company has not expressed any intent to discontinue its
contributions or terminate the Plan, it is free to do so at any time subject to
the provisions of ERISA and the Code which state that, in such event, all
members of the Plan shall be fully vested in the amounts in their accounts. In
the event of Plan termination, members will become 100% vested in the Company's
contribution portion of their accounts.
NOTE 5 -- RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
(dollar amounts in thousands)
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
Net assets available for benefits per the financial
statements..................................................... $98,770
Amounts allocated to withdrawing members at December 31, 1996.. 169
-----------
Net assets available for benefits per the Form $ 98,968
5500.......................................... -----------
The following is a reconciliation of benefits paid to members per the financial
statements to the Form 5500:
Benefits paid to members per the financial
statements......................................................... $ 16
Amounts allocated to withdrawing members at December 31, 1996...... 169
-------
Benefits paid to members per the Form 5500......................... $185
-------
Amounts allocated to withdrawing members are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
December 31, 1996, but not yet paid as of that date.
<PAGE>
<TABLE>
COGNIZANT CORPORATION SAVINGS PLAN
SUPPLEMENTAL SCHEDULE
<CAPTION>
<FN>
Item 27a - Schedule of Assets Held for Investment purposes (dollar amounts in
thousands).
</FN>
December 31, 1996
Description of Asset Cost Fair Value
- - -------------------------------------- --------------- ---------------
<S> <C> <C>
BT Pyramid Directed Account Cash Fund $ 1,441 $ 1,441
BZW Barclays Money Market For EBT 7,886 7,886
Wells Fargo Equity Index Fund 18,980 37,225
BZW Equity Index Fund 66 67
ACNielsen Common Stock 557 797
Cognizant Common Stock 3,999 5,935
Dun & Bradstreet Common Stock 2,628 4,130
Metropolitan Life - Matures on 10/01/1999 491 491
John Hancock - Rate 6.17% Matures on 10/1/1996 1,160 1,160
John Hancock - Rate 5.84% Matures on 10/1/1997 2,828 2,828
John Hancock - Rate 5.98% Matures on 10/1/1998 2,023 2,023
Metropolitan Life-Rate 6.15% Matures on 10/1/2000 1,225 1,225
Metropolitan Life-Rate 6.75% Matures on 10/2/2000 2,911 2,911
New York Life - Rate 6.25% Matures on 4/3/2000 1,881 1,881
Principal Mutual-Rate 5.35% Matures on 4/1/1998 3,417 3,417
Principal Mutual-Rate 6.09% Matures on 10/1/1998 1,813 1,813
John Hancock - Rate 6.22% Matures on 4/3/2000 2,535 2,535
Metropolitan Life-Rate 7.33% Matures on 4/1/1999 3,452 3,452
New York Life - Rate 7.19% Matures on 10/1/1999 2,009 2,009
Principal Mutual - Rate 6.05% Matures on 4/1/1997 760 760
Principal Mutual-Rate 7.24% Matures on 10/1/1999 1,948 1,948
Principal Mutual-Rate 6.40% Matures on 10/2/2000 2,835 2,835
</TABLE>
<PAGE>
<TABLE>
COGNIZANT CORPORATION SAVINGS PLAN
SUPPLEMENTAL SCHEDULE
<CAPTION>
<FN>
Item 27d - Schedule of Reportable Transactions for the period November 1, 1996
through December 31, 1996.
</FN>
Current Value
of Asset
Identity of Party Involved/ Purchase Selling Cost of Transaction
Description of Investment Price Price Asset Date Gain/(Loss)
- - -------------------------------- ------------- ---------- ---------- ---------------- --------------
<S> <C> <C> <C> <C> <C>
There were no single or series
transactions that were greater than 5%.
</TABLE>
<PAGE>
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
- - ------------------- -----------------------------------------------------
EX - 23 Consent of Independent Accountants
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent accountants, we hereby consent to the incorporation of
our report included in this Form 11-K, into the Corporation's previously filed
Registration Statement on Form S-8 (File No. 333-13889).
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Stamford, Connecticut
June 18, 1997
